If the court grants the request, there will officially be more states defending the ACA in this lawsuit than opposing it.
Four state attorneys general sought formal permission Thursday to join the California-led coalition of Democratic states defending the Affordable Care Act against a legal challenge.
If the court grants the request from Colorado, Michigan, Nevada, and Iowa, then the coalition will grow to include 20 states, plus the District of Columbia. That would make the California-led coalition of states defending the ACA bigger than the Texas-led coalition of states suing to overturn the Obama-era law.
In a motion filed with the Fifth Circuit Court of Appeals, where justices are reviewing a lower court's decision declaring the entire ACA invalid, the four states argued that their motion to intervene is timely because three of them—Colorado, Michigan, and Nevada—had newly elected attorneys general take office in recent weeks.
Colorado Attorney General Phil Weiser, Michigan Attorney General Dana Nessel, and Nevada Attorney General Aaron Fordhad already announced before taking office last month that they intended to join the ACA suit.
Voters in the fourth state, Iowa, reelected Attorney General Tom Miller by a wide margin last fall, as The Des Moines Registerreported. Miller began his 10th term last month as attorney general. A spokesperson for Miller's office told HealthLeaders that the timing of Miller's decision to join the suit had nothing to do with the election, noting that Iowa has joined other ACA lawsuits in recent years.
There were 20 states named among the plaintiffs in the Texas-led lawsuit filed nearly a year ago, but two of those states—Maine and Mississippi—were represented by their governors, not their attorneys general. The Maine Attorney General's Office has since clarified that the state itself is not a party to the suit because then-Gov. Paul LePage lacked authority to enter litigation on Maine's behalf when he signed onto the ACA suit. The Mississippi Attorney General's Office similarly holds that Gov. Phil Bryant is participating in the suit as an individual.
Furthermore, last fall's midterm elections flipped the governorship and attorney general's office in Wisconsin from Republican to Democrat. Newly elected Wisconsin Attorney General Josh Kaul had signaled his intent to withdraw his state from the list of plaintiffs in the ACA challenge, with the support of new Gov. Tony Evers. The state's Republican-controlled legislature, however, blocked Kaul from doing so, as Kaul himself acknowledged last week in a letter to Evers.
That leaves 18 plaintiff states (including Wisconsin) and potentially 20 states, plus D.C., intervening as defendants in the Texas-led ACA challenge.
Expedited Appeal Requested
California Attorney General Xavier Becerra requested in a filing Friday that the Fifth Circuit expedite its review of "this exceptionally important case," arguing that
"The ACA restructured nearly one-fifth of the nation's economy and is a central pillar of our healthcare system," Becerra wrote.
"A wide range of fiscal, regulatory, and individual decisions depend on the outcome of this appeal," he added.
The filing asks the court to set a deadline of March 29 for opening briefs, and it doesn't object to the defendants's request for oral arguments to be held the week of July 8.
Even though President Trump's "profound disdain for the ACA cannot be seriously disputed," one cannot reasonably infer that the Trump administration will end its enforcement of the ACA in whole or in part, U.S. District Judge Ellen Lipton Hollander wrote.
"Neither the President's zealous attempts to repeal the statute, nor his derisive comments about it, support an inference that he will fail to enforce the law," Hollander wrote.
If the administration were to abandon the ACA, then Maryland would be allowed to re-file its lawsuit.
Editor's note: This story was updated Monday, February 4, 2019, with additional information.
The proposal would end safe-harbor protections for the rebates drug manufacturers pay to PBMs and add safe-harbor protections for drug discounts offered directly to patients.
In a highly anticipated move to curb prescription drug prices, the Trump administration announced plans Thursday to effectively kill the rebates drug makers pay to pharmacy benefit managers.
The idea is to pass savings along to patients by increasing transparency, encouraging discounts given directly to consumers rather than middlemen, and prohibiting a compensation system that incentivizes annual price hikes, according to Health and Human Services.
"This proposal has the potential to be the most significant change in how Americans' drugs are priced at the pharmacy counter, ever, and finally ease the burden of the sticker shock that millions of Americans experience every month for the drugs they need," HHS Secretary Alex Azar said in a statement.
Currently, the rebates drug makers pay to PBMs are permissible because they are covered by safe-harbor protections under the Anti-Kickback Statute. This proposal, however, would do away with the safe harbor for prescription drug rebates paid by manufacturers to PBMs, Medicare Part D plans, and Medicaid managed care organizations. It would implement a fixed-fee model between PBMs and manufacturers and add a safe harbor for discounts offered directly to consumers.
While the rulemaking would not apply directly to commercial payers, it may affect how they conduct their business moving forward, as is commonly the case with HHS policymaking, a senior official with the HHS Office of Inspector General acknowledged Thursday on a call with reporters.
PBMs 'concerned': JC Scott, president and CEO of the Pharmaceutical Care Management Association (PCMA), which represents PBMs, released a statement saying his group is "concerned" eliminating the safe harbor for PBM rebates could ultimately lead to higher drug costs "unless there is a viable alternative for PBMs to negotiate on behalf of beneficiaries." Scott pointed to a consultant study and data from the Centers for Medicare & Medicaid Services as evidence that PBM rebates reduce costs.
PhRMA pleased: Stephen J. Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), which represents the pharmaceutical industry, released a statement applauding the administration's efforts "to reform the rebate system," adding that Thursday's proposal would "fix the misaligned incentives" that prompt insurers and PBMs alike to favor drugs with high list prices.
'Good news' for those with diabetes: Cynthia Rice, senior vice president of advocacy and policy at JDRF, which supports research on Type 1 diabetes, released a statement saying the proposal "is good news for people with diabetes" because the rebates drug makers provide account for about 70% of the list price for insulin. "It is unconscionable for anyone to struggle to access insulin," Rice added.
A sign of progress? David Mitchell, founder of Patients For Affordable Drugs (and a cancer patient himself), released a statement praising the proposal as a sign of progress. “The proposed rule is a serious step forward," Mitchell said. "It would begin to rid our system of secret deals between drug companies and pharmacy benefit managers that drive up prices and hurt patients." The proposal stops short of reducing prices for sole-source drugs, he noted, calling for more action on Medicare Part D and Part B.
The CMS proposal for 2020 would give plans more flexibility to cover supplemental benefits for people with chronic illnesses, including those suffering from chronic pain or undergoing treatment for addiction.
Medicare Advantage plans would gain even more flexibility next year to provide supplemental benefits to beneficiaries with chronic illnesses, under the terms of a proposal announced Wednesday by the Centers for Medicare & Medicaid Services.
Demetrios Kouzoukas, principal deputy administrator for Medicare and director of the Center for Medicare, said in a call with reporters that the proposal would allow any benefit that improves or maintains healthcare and could enable plans to reduce cost-sharing.
While CMS isn't requiring plans to provide these added benefits, it would allow them to elect to cover additional services, such as home-delivered meals, Kouzoukas said.
This comes after CMS allowed more supplemental benefits for 2019 and Health and Human Services Secretary Alex Azar hinted in a speech last fallthat additional flexibility would be forthcoming.
"How can someone manage diabetes if they are constantly worrying about how they’re going to afford their meals each week?" Azar said in prepared remarks at the Hatch Foundation for Civility and Solutions last November.
"How can a mother with an asthmatic son really improve his health if it’s their living environment that’s driving his condition?" Azar added. "This can feel like a frustrating, almost fruitless position for a healthcare provider, who understands what is driving the health conditions they're trying to treat, who wants to help, but can’t simply write a prescription for healthy meals, a new home, or clean air."
In a statement Wednesday, CMS Administrator Seema Verma said enrollment in Medicare Advantage plans "is at an all-time high" and that policymakers "need to maximize competition" by allowing for added flexibility.
The letter also proposed rates for MA plans next year, with an average 1.59% rate increase. The increase does not include a 3.3% expected average increase in risk scores, due to an underlying coding trend, according to a CMS fact sheet.
Comments on the proposal will be accepted until March 1, with an estimated finalization date on or before April 1.
The case could bring broad and long-lasting implications for a healthcare industry that has spent most of the past decade reorienting itself around the ACA's requirements.
After putting the case on hold during the federal government's partial shutdown, the Fifth Circuit Court of Appeals resumed proceedings Tuesday in a legal dispute over the constitutionality of the Affordable Care Act.
U.S. District Court Judge Reed O'Connor in Fort Worth, Texas, ruled last month that the ACA's individual mandate was rendered unconstitutionalby Congress zeroing out its tax penalty. Since the rest of the sprawling legislation hinges on the mandate, the entire ACA is invalid, O'Connor ruled. He stayed his judgment, pending appeal.
Now the Fifth Circuit is reviewing the decision, weighing arguments from not only the Texas-led coalition of Republican state officials suing to overturn the law and the U.S. Department of Justice defending parts of it but also from a California-led coalition of Democratic state attorneys general stepping in to defend the Obama administration's signature healthcare policy.
What's more, Democrats who took control this month of the U.S. House of Representatives have asked that their chamber, too, be allowed to intervene in defense of the ACA, after a midterm election in which the ACA's preexisting condition protections featured prominently.
"By any measure, the exceptional circumstances presented here require recognition of the right of the House to intervene in this Court order to defend the constitutionality of the federal statute at issue," attorneys for the House wrote.
The case, which the White House has said it expects to ultimately be decided by the Supreme Court, could bring broad and long-lasting implications for the U.S. healthcare industry, which has spent most of the past decade reorienting itself around the ACA's requirements.
Circuit Court Judge Leslie H. Southwick lifted the Fifth Circuit's stay Tuesday afternoon. The parties have until February 8 to respond to the House's motion to intervene.
The unexpected retirement announcement comes amid what one unnamed source told The Boston Globe was 'a lot of friction' between the Partners CEO and leaders at the system's major Boston hospitals.
Care New England Health System (CNE) doesn't expect this week's retirement announcement from Partners HealthCare CEO David Torchiana, MD, to derail a pending deal between the two systems.
CNE, based in Providence, Rhode Island, said in a statement Tuesday that Torchiana's planned departure this April "will have no impacton our ability to finalize this important transaction" with the Boston-based system, which is being reviewed by Rhode Island regulators.
The optimistic note from CNE comes despite a report by The Boston Globe's Priyanka Dayal McCluskey and Liz Kowalczyk citing an unnamed source to suggest the retirement was announced amid "a lot of friction" between Torchiana and hospital leaders within the Partners system, some of whom were reportedly displeased with the plan to grow into Rhode Island.
Partners is the largest health system in Massachusetts and includes both Massachusetts General Hospital and Brigham and Women's Hospital. It acquired the specialty teaching hospital Massachusetts Eye and Ear last April and secured approval last month from federal regulators to acquire CNE as well.
Partners had been in merger talks with insurer Harvard Pilgrim, but those discussions ended last November amid concerns that regulators might not sign off.
"We welcome the competition," Partners Chief Financial Officer Peter Markell told the Boston Business Journal last month, brushing aside any notion of a new competitive threat from the combined Beth Israel Lahey Health. "We are not afraid, worried or whatever. We believe in ourselves."
In a statement released Tuesday to HealthLeaders and other media outlets, Torchiana expressed "full confidence in the future of our organization."
Partners Board of Directors Chair Scott Sperling told employees that Torchiana—a cardiothoracic surgeon commonly known by the nickname "Torch"—informed the board Monday evening of his intent to retire, after serving as president and CEO since March 2015.
"This is something that I know Torch has been contemplating for some time," Sperling said in a statement released publicly Tuesday. "Torch has been a valued leader, and he has led this organization in a thoughtful and effective manner."
Sperling said the board will begin the task of launching on a national search for Torchiana's successor in the coming weeks.
Torchiana's planned retirement is effective April 29.
The push to set a healthcare policy agenda could be limited by an impasse redux over border-wall funding.
As policy discussions return this week to Capitol Hill, Democrats are looking to set an agenda that focuses on healthcare, both to fulfill promises they made to midterm voters and to score political points.
In its first policy hearing since Democrats took control of the House this month, the House Ways & Means Committee discussed Tuesday morning the Affordable Care Act and its coverage protections for Americans with preexisting conditions.
"Despite their repeated claims to support the protections for healthcare with people in preexisting conditions, their actions have directly contradicted the statements," Neal said. "They're currently leading ongoing efforts to undermine or eliminate the current law's protections for Americans with preexisting conditions. This is the wrong course of action."
Rep. Kevin Brady, R-Texas, who became the committee's ranking member this month after serving more than three years as its chairman, defended his co-partisans, arguing that Republicans support preexisting condition protections and other provisions of the ACA but see the law as making care too expensive.
"We have to do more than protect healthcare. We have to work together to make it affordable," Brady said. "The ACA is failing too many Americans who face soaring costs, skyrocketing deductibles, and few choices of local doctors and hospitals. It really is time for a fresh start, this time with both parties working together, creating truly affordable healthcare focused on patients, not on Washington."
The committee heard testimony from Kaiser Family Foundation Senior Fellow Karen Pollitz, Oregon Insurance Commissioner Andrew Stolfi, Cancer Society Cancer Action Network Vice President for Federal Advocacy and Strategic Alliances Keysha Brooks-Coley, American Heart Association volunteer Andrew Blackshear, and Nebraska Farm Bureau Chief Administrator and Secretary-Treasurer Rob Robertson.
The hearing comes after a 35-day partial government shutdown stemming from President Donald Trump's demand that Congress fund a border wall and lawmakers refusing to oblige. Trump has threatened to shut the government down again February 15 if he doesn't get his way, so Democrats' current window to set a healthcare agenda may not last long.
Busy Day on Capitol Hill
There were four healthcare-related hearings scheduled for Tuesday morning on Capitol Hill:
The idea behind the leadership change is to give more bandwidth to focus on strategy for the CHS-owned system that has faced drama in recent years.
Lutheran Health Network CEO Mike Poore is looking to hire a new CEO for the health system, based in Fort Wayne, Indiana. But he's not looking for a replacement.
Poore, who has been CEO about a year-and-a-half, will retain his title as regional president after a new hire takes on the CEO mantle, as The Journal Gazette's Sherry Slater reported. The idea behind the leadership change is to give Poore more bandwidth to focus on strategy.
The system had initially been looking to create a new chief operating officer position, but the title in the job listing was later changed, as Slater reported.
A job listing posted about two weeks ago says the network CEO will report to the regional president and handle hospital operations for the market or region. Candidates are expected to hold a master's degree and have at least eight years of leadership experience in acute healthcare settings, preferably overseeing multiple sites, the listing states.
Lutheran Health Network, which is owned by Community Health Systems, has had its share of drama in recent years. Amid financial hardship, CHS considered selling the network in 2016, and former CEO Brian Bauer was fired in 2017. A group of physicians then tried unsuccessfully to acquire the network, the chief medical officer was fired, and two other prominent physicians resigned.
In 2018, St. Joseph Hospital CEO Karen Fordham resigned after working in the Lutheran Health Network just seven months, having been accused of saying Bauer "should be shot and killed for what he did." Bauer was sued by CHS for allegedly using privileged information to seek new ownership and help competitor IU Health establish its presence in the city, as the News-Sentinelreported last August.
One of Poore's priorities includes a $120 million hospital planned for downtown Fort Wayne, as The Journal Gazette reported.
The president made an announcement from the White House Rose Garden regarding the partial government shutdown.
President Donald Trump announced Friday afternoon that he will sign a short-term spending bill to reopen the federal government through February 15, ending the longest shutdown in U.S. history.
The announcement came as furloughed federal workers reached their second consecutive payday without a paycheck, putting a strain not only on their personal finances but also on the businesses that serve them.
The shutdown began December 22 after Trump insisted that Congress authorize $5.7 billion for a border wall and lawmakers refused to do so. The three-week deal doesn't include any funding for the wall but gives more time for negotiations, while bringing federal employees back to work with back-pay.
Trump said he expects Democrats and Republicans alike to operate in good faith over the next three weeks to address concerns over border security, and teed up a potentially dramatic showdown.
"We really have no choice but to build a powerful wall or steel barrier," Trump said during a speech in the White House Rose Garden. "If we don't get a fair deal from Congress, the government will either shut down on February 15 again or I will use the powers afforded to me under the laws and Constitution of the United States to address this emergency."
Trump, who has reportedly considered paying for the wall by declaring a national emergency, left the podium without taking any questions.
The government's big-ticket health programs were already funded, so the partial shutdown hasn't directly impacted most programs operated by Health and Human Services or the Centers for Medicare & Medicaid Services. The shutdown has, however, affected the Food and Drug Administration, which receives significant funding via the Department of Agriculture, and the Indian Health Service, which receives funding via the Department of the Interior, as Kaiser Health News' Shefali Luthra reported.
The executive, who serves on the American Hospital Association's board of trustees, said in a parting word to staff that the health system is 'at an all-time high.'
Allen Weiss, MD, resigned this week as president and CEO of NCH Healthcare System in Naples, Florida, after a vote of "no confidence" by the system's physicians.
The board accepted resignations from Weiss and Chief of Staff Kevin Cooper effective Wednesday, as the Naples Daily News reported, noting that a major point of tension between Weiss and the NCH staff was a controversial pilot project that some independent primary care physicians said would interfere with their patient relationships.
Under the pilot, employed hospitalists had been tasked with handling more admissions for certain NCH hospital units. After public outcry, the system said it would back away from that component of the plan.
"The pilot admissions program will be modified to be inclusive of all physicians on the medical staff," NCH said in a statement, as the Daily News reported. "The board shared that there have been valuable lessons learned over the past six months that include better patient satisfaction, stronger support for our nurses and overall outcomes."
Weiss, who is two years into a three-year term on the American Hospital Association board of trustees, had been NCH's CEO since 2006. He touted NCH's accomplishments in his final "Straight Talk" columnon Thursday, saying the system is "at an all-time high."
"I extend sincere gratitude to the thousands of dedicated NCH nurses, care-givers, support staff, medical staff, Board members, and other colleagues with whom I have worked," Weiss wrote. "The above accomplishments are credits to these incredible people who have the grit, determination, and focus on what is best for the residents of our diverse county. I have often shared, 'When you do the right thing often enough, you get the right result.'"
NCH Chief Operating Office Phil Dutcher will serve as interim CEO while the board searches for Weiss' successor.
The dispute highlights uncertainty over how incumbents should view the initiative's potentially disruptive role in the healthcare industry.
United Health Group's Optum Inc. filed suit last week against a former vice president who left the company for a job with the Amazon-backed healthcare venture being helmed by CEO Atul Gawande.
At the center of the dispute is a debate over whether the venture—which Amazon is developing in partnership with Berkshire Hathaway and J.P. Morgan Chase—is a "competitor" to Optum.
The disagreement highlights uncertainty over how incumbents should view the initiative's potentially disruptive role in the healthcare industry. While some may welcome the tech-enabled retail giant as a catalyst and innovative partner, others sense a need to defend their turf. That certainly seems to be the case for Optum, which accuses its former vice president of corporate strategy and product, David Smith, of breaching his Optum contract by taking trade secrets to his new employer.
Smith had been working for Optum about two years when he emailed his resume directly to Gawande on June 24, 2018, Smith said in an affidavit filed Tuesday with the court. That was just four days after Gawande was named CEO of the venture. Although he never heard back from Gawande, he was later contacted by a recruiter who arranged interviews in October and November, followed by a job offer in December, Smith said.
Optum alleges that Smith printed a confidential Optum document "just one minute before printing his résumé" on a day when he had contact with representatives of the Amazon-backed venture, according to the complaint filed in the U.S. District Court for Massachusetts. Smith also solicited confidential information "unrelated to his own job duties at Optum and for which he had no legitimate business need," the complaint alleges.
The suit, which was first reported Wednesday by STAT's Kate Sheridan and Casey Ross, describes Smith as "a senior executive at Optum" and the Amazon-backed venture as "Optum's competitor." Smith, however, contested both of those characterizations. His affidavit states that he was not a member of Optum's executive team or part of its senior leadership. And his attorneys wrote in a separate filing Tuesday that Smith had already given Optum an explanation of the Amazon-backed venture's business "and why it does not compete with Optum."
Optum attorneys had been in talks with attorneys for the Amazon-backed venture to see about delaying Smith's start date, but those talks stalled, as CNBC's Bertha Coombs reported. Optum contends that Smith was among fewer than 50 people with access to the company's detailed profit and loss statements, Coombs reported.
The new venture hasn't even announced a name, let alone a detailed strategy. Without dispelling much mystery about the venture, J.P. Morgan CEO Jamie Dimon told CNBC's "Squawk Box"during an interview at the World Economic Forum in Davos, Switzerland, on Wednesday that the venture is still focused on building its team.
"It's a long-term view. We don't expect any announcement anytime soon," Dimon said. "We will share if we come up with anything good, but we want to start small. Test a bunch of different things."